Retirement Key Term Dictionary

This dictionary defines essential terms related to retirement planning in Australia.

Account Types:

  • Superannuation Fund: A specialized account that holds your retirement savings. You can have multiple super accounts throughout your working life.
  • Traditional IRA (US): An individual retirement account in the United States with tax-deferred contributions and taxed withdrawals in retirement. (Not directly applicable to Australia)
  • Roth IRA (US): An individual retirement account in the United States with after-tax contributions and tax-free withdrawals in retirement. (Not directly applicable to Australia)


  • Concessional Contributions: Pre-tax contributions made to your super fund, reducing your taxable income.
  • Salary Sacrifice: An arrangement where you agree to receive a lower salary in exchange for your employer making a concessional contribution to your super.
  • Non-Concessional Contributions: After-tax contributions made to your super fund, subject to contribution caps.

Investment and Fees:

  • Investment Options: Different investment choices within your super fund, varying in risk and potential return (e.g., shares, bonds, cash).
  • Investment Strategy: An approach to allocating your super savings across different investment options based on your risk tolerance and retirement goals.
  • Management Fees: Fees charged by your super fund to cover administration and investment management costs.

Retirement Income:

  • Retirement Age: The age at which you can access your superannuation savings. The Australian Government is gradually increasing the retirement age.
  • Pension: A regular income stream received in retirement, often from an annuity or defined benefit super fund. (Defined benefit funds are rare in Australia)
  • Annuity: An insurance contract that provides a guaranteed income stream for life in exchange for a lump sum payment.
  • Lump Sum Payment: A one-off payment of your superannuation savings upon retirement.

Government Programs:

  • Australian Taxation Office (ATO): The government agency responsible for administering superannuation taxes and regulations.
  • MoneySmart: An ASIC initiative providing financial education resources, including information on superannuation.
  • Age Pension: An income support payment from the Australian Government for eligible retirees.

Other Key Terms:

  • Consolidation: Combining multiple super accounts into a single account to reduce fees.
  • Rollover: Transferring your super savings from one fund to another.
  • Estate Planning: Planning for the distribution of your assets, including your superannuation, after death.
  • Beneficiary: The person or entity who will receive your superannuation savings upon your death.
  • Required Minimum Distribution (RMD) (US): The minimum amount you must withdraw from your retirement accounts annually after reaching a certain age. (Not directly applicable to Australia, but a useful term to know)

Note: This is not an exhaustive list, but it covers many of the essential terms you’ll encounter when planning for retirement in Australia.